; 6,69,505.50 against Bill of Entry No.2523/1236 (M-V Maerkicle-mentine) against six Import Licences bearing different dates endorsed in terms of para 51(iii) of the Import Export Policy 1985-88 permitting importation of Non-OGL Capital Goods to eligible actual users (industrial) in terms of para 263(A) of AM 85-88. The petitioners sold these goods on High Seas to M/s Fedders Lloyd Corporation Pvt. Ltd., who were eligible actual users (Industrial) for manufacture of air conditioners against thei .....

tice further stated that the imported compressors used in the manufacture of end products as components and as such they were not capital goods and the same could not have been imported as non OGL goods. The license against which the importation was made was valid only for capital goods. Therefore, the compressor which was component of the end product namely air conditioner was not covered by the licence. The importation was, therefore, unauthorized in absence of any other valid licence. It was .....

y them. 5 The aforesaid submission did not find favour with the adjudicating authority. The Adjudicating Authority after hearing the parties found that the imports made by the petitioners were not in accordance with the import and export policy. The findings recorded in this behalf read as under: I have gone through the records of the above case and have carefully considered the submissions made by the importer and the High Sea Buyers. No doubt, the item is specific in the License List, but lice .....

no. In their own admission, these compressors are to be used in the manufacture of air conditioners which are to be sold in the market. Since compressors in question are to be used as components for the manufacture of air conditioners for which M/s Fedders Lloyds are registered as manufacturer these cannot be considered as capital goods. Capital goods means any plant, machinery, equipment or accessories required by an investor for production of goods or for rendering services, including those r .....

etween manner of disposal of capital goods which is covered by sub-para (i) and that of components etc. which is covered by sub para (ii). The impugned goods, therefore, are not covered by licences submitted by importer and are liable for confiscation under section 111(d) of the Customs Act 1962 read with section 3(2) of the Import and Export Act, 1947. M/s Fedders Lloyds and M/s Kamal Traders, have knowingly imported and attempted to clear the compressors as capital goods knowing fully well tha .....

y the petitioners, namely, compressors for air conditioners and refrigerators are specifically covered by the license issued by the licensing authority. According to him, it is well settled that once the license is issued by the licensing authority then the customs authorities cannot go behind the issuance of licence. The reliance was placed on the judgment of the Apex Court in the case of Titan Medical Systems Pvt. Ltd. Vs. Collector of Customs, New Delhi reported in 2003(151) E.L.T.254(S.C.) a .....

n of the customs authority is without authority of law. In support of this submission, reliance is placed on Atul Commodities Pvt. Ltd. Vs. Commissioner of Customs reported in 2009(235) ELT 385(SC) and MJ Exports Vs. CEGAT reported in 1992(60) ELT 161 (SC). Mr. Thakkar further urged that the customs authorities have in past permitted imports of identical goods under the very same licences as such impugned action of the customs authorities is arbitrary and discriminative. 9 Per contra, Mr. Jetley .....

ssion of Mr. Jetly, capital goods means any plant, machinery, equipment or accessories required for manufacture or production, either directly or indirectly, of goods or for rendering services, including those required for replacement, modernization, technological up-gradation or expansion. Capital goods for actual users would be machines installed in their factory for production of goods or for rendering services. By way of illustration, he illustrates that the compressors to be installed in th .....

. The capital goods defined under the EXIM Policy reads as under: Capital Goods means any plant, machinery, equipment or accessories required for manufacture or production, either directly or indirectly, of goods or for rendering services, including those required for replacement, modernisation, technological up-gradation or expansion. Capital goods also include packaging machinery and equipment, power generating sets, machine tools, catalysts for initial charge, equipment and instruments for t .....